Why the Bernie Sanders insurgency matters

Bernie Sanders’ achievement in Iowa, a virtual tie with Hillary Clinton, was one of the most remarkable electoral results in recent memory. Just as noteworthy as Sanders’ rise in the polls — he closed a 50-point gap in Iowa in just over six months — is the way his campaign’s themes and issues have resonated with a mass audience.

The core messages of the Sanders campaign, once scoffed at or derided when they were expressed by Occupy Wall Street, have become common sense for millions of people.

For some time now, mainstream political commentators have been throwing everything but the kitchen sink at Sanders to dissuade primary voters from taking his campaign seriously. These pundits, presenting themselves as hard-headed realists while wagging their fingers, try to explain away Sanders’ growing public appeal. They are unwilling, and seemingly unable, to look fairly at what the campaign is proposing and how that might relate to people’s lives.

In other words, the pundits’ job is to distract from the things that really matter: the series of concrete ways that people’s lives could be be improved. Sanders’ meteoric rise, whatever else has helped bring it about, is a response to real inequality, stagnant incomes and bleak prospects for many Americans.

“Sanders’s exasperation was the principal fact to be communicated, more than any political content. Trump was about winning again. Sanders was about having lost. The vagueness of American politics is what astonished the outsider. It’s all about feelings and God and bullshit. Sanders actually uttered the following sentence out loud: ‘What we’re saying is when millions of people come together to restore their government we can do extraordinary things.’ Nobody asked what he meant. Nobody asked for numbers. They applauded. Better to take it in the spirit in which it’s given, like a Catskills resort comedian.”

You have to work pretty hard to so completely miss the content of a Bernie Sanders stump speech. The same core issues are there every time. And yes, policy proposals, granted ones presented in broad brushstrokes, are clearly enumerated. Even his triumphant speech in Iowa late Monday night relentlessly went through the issues, one by one. Each of these key points highlights ways in which real inequality manifests, and points (albeit in some cases not far enough) toward reform and remedies that will benefit real people. On all these issues, Sanders is offering more than the corporate money supported Clinton.

If the pundits and ideologues weren’t sowing so much confusion, it wouldn’t even be necessary to point this out.

$15 minimum wage

While some cities in the United States have recently raised their minimum wage, with some even planning to get to $15 within a few years, the inflation-adjusted minimum wage across most of the country is lower today than it was in the 1970s. Consider that. Four decades of economic advance have left the lowest paid worse off. Minimum wage workers today may have iPhones, but too many are barely making ends meet for themselves and their families.

Of course, simply raising the minimum wage won’t be enough.

Sanders’ call for a nationwide $15 minimum wage is an integral part of his message that inequality is not natural but the result of policy choices and power. Raising the minimum wage is not only about restoring something ephemeral like dignity, but also about slowly swinging the pendulum of power back towards workers.

Of course, simply raising the minimum wage won’t be enough. Less than 10 per cent of U.S. workers are members of a union today. Reinvigorating the labour movement in a way that brings power back to the grassroots will have to happen for more substantive change. Bernie’s push for a $15 minimum wage across the United States and his focus on the need for greater participation and democracy could help push this more transformative change forward.

Universal health care

At the surface, the U.S. health care system is marked by a huge contradiction: the country manages to both spend the most on health care among developed countries and do very poorly on a raft of health measures.

Bernie Sanders’ championing of universal public health care exposes the simple cause of this disparity: the network of private health insurers, private health providers, pharmaceutical companies and army of consultants who all profit from the unequal and rationed delivery of what should be a human right.

Universal health care would immediately impact the lives of millions of people. The drama of not having coverage or having the wrong kind of coverage or not having enough to pay for a deductible or even just the small dramas of navigating the maze of forms, payments and providers — all of these would be alleviated with the social democratic cure of a universal public service.

When the media reduces Sanders’ program to economic inequality, it glosses over the many social and other inequities that are deeply intertwined with economic inequality. Poor health, for example, is a highly racialized issue. Just look at the enormous gaps in life expectancy and other measures.

Health and economics aren’t separate, and one can’t be reduced to the other, but a system where income and wealth go disproportionately to the 1 per cent while tens of millions don’t have access to health care at all and untold millions have inadequate care only reproduces and deepens deep divisions.

Free public college

Maybe it’s not such a mystery why young people overwhelmingly prefer Sanders to Hillary Clinton.

It might have something to do with his key campaign proposal of abolishing tuition fees at all four-year public universities and colleges in the United States. In fact he’s already put the idea forward, introducing legislation in the Senate for new federal spending on postsecondary education, to be supplemented by state-level funds.

When faced with accusations that free college is unrealistic, Sanders blasts back by listing all the European countries where free tuition has already been introduced. He also calls for relief of student debt, which has become a nationwide crisis. (Even 40-something Republican presidential contender Marco Rubio talks about how he only recently paid off his student loans.)

Students, and the many young workers who can’t afford to be students, would appear to be perfectly rational political actors in flocking to Sanders.

Progressive taxes

Sanders’ pledges to expand and universalize services are matched by his willingness to talk about paying for them. If inequality has grown and public services have deteriorated, it is because money has been flowing upwards and sticking rather than being redistributed.

Delivering a full range of universal services will require more people to pay more in taxes.

New income and wealth do go disproportionately to the top 1 per cent and less of the population, as Sanders doesn’t shy from repeating. Any social democratic program will need to reverse this flow. Sanders has proposed higher income taxes on the wealthy, closing loopholes for investment income and taxes on Wall Street speculation to this end.

The senator from Vermont has broken the consensus on the anti-tax, pocketbook rhetoric that has dominated politics in the United States and elsewhere — rhetoric that is the home turf of everyone from Hillary Clinton to Ted Cruz. Delivering a full range of universal services will require more people to pay more in taxes and a redirection of resources away from waste such as the military and corporate subsidies.

A truly different economy will require far more democratic participation. Talking about the wealthy paying more, saying that it is “too late for establishment economics” and inching towards greater contributions from most for social(ized) goals, Sanders has opened an important debate.

Taking climate change seriously

It’s one of the most repeated applause lines of Sanders speeches: Climate change is real, humans are causing it, and we have a moral responsibility to act to mitigate it.

Sanders has one the support of many prominent activist campaigners including 350.org’s Bill McKibben.

This statement is maddeningly obvious, but it’s a direct response to the ongoing climate denialism of the Republicans, a party that is one of the last bastions of this retrograde nonsense on the planet.

But as an early champion of climate issues, however, Sanders has one the support of many prominent activist campaigners including 350.org’s Bill McKibben. What’s more, his general rhetoric is matched by leadership in opposing specific fossil fuel megaprojects. Whereas Clinton waited years to take a position against the Keystone XL tar sands proposal, Sanders took a strong stand against it early on, helping push the Obama administration to their eventual rejection of the pipeline.

Political revolution

These measures, and other needed measures that go beyond the limits of Sanders’ campaign, require deep political transformation. Contrary to the typical rhetoric of presidential candidates, Sanders has made this reality central to his campaign.

His campaign is not a manicured, media-driven effort to sell a progressive product.

Sanders’ call for “political revolution” is the glue that holds his program together and differentiates him from other upstart Democrats of the last decades. His campaign is not a manicured, media-driven effort to sell a progressive product. He seems to genuinely understand and want to inspire grassroots political mobilization. He will not turn decades of economic degradation into engagement for a truly democratic economy over the course of a presidential campaign, but it is hard to say that his campaign cannot bear fruit for the U.S. left.

Two moments stood out from Bernie’s speech in Iowa Monday night. The first was his finger pointed at the camera early on, calling out the media for willfully misrepresenting his campaign. Then there were his closing remarks, which echoed the common theme of political revolution, imploring those interested in his campaign to join actively.

These simple messages are the stuff to build off on in his campaign: we have to take on powerful interests and we have to do it actively.

Far from being just a lament for what has been lost, Sanders’ campaign has stoked new hopes and energized new political constituencies. Millions of people can see that there is, as the campaign slogan says, “a future to believe in.” But this future won’t be delivered by one politician; this future can only be fought for and won by millions.

The Ministry of Health and Family Welfare,India issued guidelines on the Zika virus disease, here today. The text of the guidelines is as follows.

Background

Zika virus disease is an emerging viral disease transmitted through the bite of an infected Aedes mosquito. This is the same mosquito that is known to transmit infections like dengue and chikungunya. Zika virus was first identified in Uganda in 1947.

World Health Organization has reported 22 countries and territories in Americas1 from where local transmission of Zika virus has been reported. Microcephaly in the newborn and other neurological syndromes (Guillain Barre Syndrome) have been found temporally associated with Zika virus infection. However, there are a number of genetic and other causes for microcephaly and neurological syndromes like Guillain Barre Syndrome.

Zika virus disease has the potential for further international spread given the wide geographical distribution of the mosquito vector, a lack of immunity among population in newly affected areas and the high volume of international travel. As of now, the disease has not been reported in India. However, the mosquito that transmits Zika virus, namely Aedes aegypti , that also transmits dengue virus, is widely prevalent in India.

A majority of those infected with Zika virus disease either remain asymptomatic (up to 80%) or show mild symptoms of fever, rash, conjunctivitis, body ache, joint pains. Zika virus infection should be suspected in patients reporting with acute onset of fever, maculo-papular rash and arthralgia, among those individuals who travelled to areas with ongoing transmission during the two weeks preceding the onset of illness.

Based on the available information of previous outbreaks, severe forms of disease requiring hospitalization is uncommon and fatalities are rare. There is no vaccine or drug available to prevent/ treat Zika virus disease at present.

World Health Organization has declared Zika virus disease to be a Public Health Emergency of International Concern (PHEIC) on 1stFebruary, 2016.

In the light of the current disease trend, and its possible association with adverse pregnancy outcomes, the Directorate General of Health Services, Ministry of Health and Family Welfare advises on the following:

Enhanced Surveillance

1.1.Community based Surveillance

Integrated Disease Surveillance Programme (IDSP) through its community and hospital based data gathering mechanism would track clustering of acute febrile illness and seek primary case, if any, among those who travelled to areas with ongoing transmission in the 2 weeks preceding the onset of illness.

IDSP would also advise its State and District level units to look for clustering of cases of microcephaly among newborns and reporting of Gullian Barre Syndrome.

The Maternal and Child Health Division (under NHM) would also advise its field units to look for clustering of cases of microcephaly among new borns.

1.2 International Airports/ Ports

All the International Airports / Ports will display billboards/ signage providing information to travelers on Zika virus disease and to report to Custom authorities if they are returning from affected countries and suffering from febrile illness.

Directorate General of Civil Aviation, Ministry of Civil Aviation will be asked to instruct all international airlines to follow the recommended aircraft disinsection guidelines

The APHOs shall circulate guidelines for aircraft disinsection (as per International Health Regulations) to all the international airlines and monitor appropriate vector control measures with the assistance from NVBDCP in airport premises and in the defined perimeter.

1.3 Rapid Response Teams

Rapid Response Teams (RRTs) shall be activated at Central and State surveillance units. Each team would comprise an epidemiologist / public health specialist, microbiologist and a medical / paediatric specialist and other experts (entomologist etc) to travel at short notice to investigate suspected outbreak.

National Centre for Disease Control (NCDC), Delhi would be the nodal agency for investigation of outbreak in any part of the country.

1.4 Laboratory Diagnosis

NCDC, Delhi and National Institute of Virology (NIV), Pune, have the capacity to provide laboratory diagnosis of Zika virus disease in acute febrile stage. These two institutions would be the apex laboratories to support the outbreak investigation and for confirmation of laboratory diagnosis. Ten additional laboratories would be strengthened by ICMR to expand the scope of laboratory diagnosis.

RT- PCR test would remain the standard test. As of now there is no commercially available test for Zika virus disease. Serological tests are not recommended.

Risk Communication

The States/ UT Administrations would create increased awareness among clinicians including obstetricians, paediatricians and neurologists about Zika virus disease and its possible link with adverse pregnancy outcome (foetal loss, microcephaly etc). There should be enhanced vigilance to take note of travel history to the affected countries in the preceding two weeks.

The public needs to be reassured that there is no cause for undue concern. The Central/ State Government shall take all necessary steps to address the challenge of this infection working closely with technical institutions, professionals and global health partners.

Vector Control

There would be enhanced integrated vector management. The measures undertaken for control of dengue/ dengue hemorrhagic fever will be further augmented. The guidelines for the integrated vector control will stress on vector surveillance (both for adult and larvae), vector management through environmental modification/ manipulation; personal protection, biological and chemical control at household, community and institutional levels. Details are at Annexure-I.

States where dengue transmission is going on currently due to conducive weather conditions (Kerala, Tamil Nadu etc) should ensure extra vigil.

Travel Advisory

Non-essential travel to the affected countries to be deferred/ cancelled2.

Pregnant women or women who are trying to become pregnant should defer/ cancel their travel to the affected areas.

All travelers to the affected countries/ areas should strictly follow individual protective measures, especially during day time, to prevent mosquito bites (use of mosquito repellant cream, electronic mosquito repellants, use of bed nets, and dress that appropriately covers most of the body parts).

Travelers having febrile illness within two weeks of return from an affected country should report to the nearest health facility.

Pregnant women who have travelled to areas with Zika virus transmission should mention about their travel during ante-natal visits in order to be assessed and monitored appropriately.

Non-Governmental Organizations

Ministry of Health &FW / State Health Departments would work closely with Non-Governmental organizations such as Indian / State Medical Associations, Professional bodies etc to sensitize clinicians both in Government and private sector about Zika virus disease.

2 Based on available evidence, World Health Organization is not recommending any travel or trade restrictions.

Co-ordination with International Agencies

National Centre for Disease Control, Delhi, the Focal Point for International Health Regulations (IHR), would seek/ share information with the IHR focal points of the affected countries and be in constant touch with World Health Organization for updates on the evolving epidemic.

Research

Indian Council of Medical Research would identify the research priorities and take appropriate action.

Monitoring

The situation would be monitored by the Joint Monitoring group under Director General of Health Services on regular basis. The guidelines will be updated from time to time as the emerging situation demands.

John McMurtry

The just-released Oxfam Davos reportAn Economy For the 1%
which the mass media have ignored arrestingly shows that 62 individuals (388 in 2010) now own more wealth than 50 per cent of the world’s population. More shockingly, it reports from its uncontested public sources that this share of wealth by half of the world’s people has collapsed by over 40 per cent in just the last five years.

Yet the big lies persist even here that “the progress has been made in tackling world poverty” and “extreme poverty has been halved since 1990.”

Unbelievably, the endlessly repeated assertion of the form that ‘the poor are being lifted out of poverty in ever greater numbers’ continues on untouched despite the hard evidence that, in fact, the poorer half of humanity has lost almost half of their wealth in just the last five years.

This big lie is significant in its implications. For not only is a pervasive claim about the success of globalization undeniably falsified while no-one notices it. Basic market theory and dogma collapses as a result. What is daily claimed as an infallible benefit of the global market is shown to be the opposite of reality. What does it mean for ‘trickle-down theory’ when, in truth, the trickle down goes up in hundreds of billions of dollars to the rich from the already poor and destitute?

What can we say now of the tirelessly proclaimed doctrine that the global market brings ‘more wealth for all’ when, in fact, unimpeachable business evidence shows the opposite reality on the ground and across the world. For the poor have undeniably lost almost half their share of global wealth while the richest have multiplied theirs at the same time. The evidence proves, in short, that the main moral and economic claims justifying the global market are very big lies becoming bigger all the time.

Accumulation by Dispossession

Worse than delusional, the lived reality of impoverishment of billions of people is reversed, the victims are continually proclaimed to be doing better under the system that increasingly deprives them of what little they have, and a trillion dollars worth of loss to the poorer half of humanity ends up in the pockets of the rich within only five years.

While the ever bigger lies go on justifying the global system that eats the poor alive as ‘poverty amelioration’, ever more of the same policies of accumulation by dispossession justify still more stripping of the majority as more “austerity,” more “welfare cuts,” and more “labour flexibility” – in a word, more starvation and depredation of people’s lives and life conditions as “more freedom and prosperity for all.”

The Statistical Shell Game that Masks the Life-Devouring Reality

As World Bank, IMF and like figures claim to show the uplifting of the poor out of poverty across the world, media of record likeThe Guardian and the New York Times
report the claims with headlines to show all is well and better for the poor and the majority as they are in fact grindingly reduced in their actual lives, work and life security. Thus the very big lies are instituted as given facts which economists and social scientists propagate without a blink.

In fact, these alleged great gains for the poor out of poverty and absolute poverty alike are based on income gains of less than a cup of coffee a day, an observation that is so well blocked from view that readers may now be seeing it for the first time. Thus the hypnotic thrall of the big lies are sustained, while no other life support system is. I have had economists and interviewers of high note respond angrily when this delusion is pointed out, as if I was letting down the poor rather than exposing the big lies. In this way, we find that the masking falsehoods have gone so deep into expert and public assumption that the real-life world can no longer be engaged. These big lies then work in the background to the non-stop big lies that precede endless foreign conflicts and wars to ‘defend the free world’.

No-one appears to observe that the income gains ’lifting the poor out of poverty’ typically refer to emigrants from the countryside into polluted cities, insecure and dehumanized life conditions for those who formerly had at least a family dwelling, clean air and water and living horizons. In short, the standard $1.50 +/- measure of uplift out of poverty and extreme poverty is inhumanly absurd, but triumphally used as proof that the system is serving the least too.

The Counter-Revolution against Social Evolution that Engineers Deepening Recession

Throughout the unseen redistribution of wealth from the poor to the rich (now buried in much talk of “inequality”), ever more “market reforms” are enforced as “enhanced competition,” “liberalized de-regulation,” “reduced welfare costs” and “austerity programs to correct excesses.” The “excessive entitlements” of the system are all projected on the victims so that the truly insane entitlements of the richest to multiply their fortunes with no committed life function, value or coordinate but still more money-demand for them is somehow not noticed. This is yet another level of normalized big lies forming the ruling thought system.

In fact beneath the pervasive propaganda conditioning citizens to believe in the private money shell game devouring the world, the poorer half of humanity has been deprived of one trillion dollars of wealth while the 62 richest people have gained almost twice as much for themselves by the operations of this global disorder. Yet the Davos Report further emphasizes that still another $760-billion (U.S.) goes annually to non-producing investors by immense transnational tax evasion with impunity across the world. Again the borderless money-capital freedom of ‘globalization’ vastly enriches the richest, while simultaneously doubling down on deprivation of the poor as ‘poverty reduction’.

Here the system is programmed in effect to strip the funding of all public sectors and institutions which have evolved to serve the common life interest. Public services and infrastructures too are perpetually driven toward bankruptcy not only by never-ending defunding, cutbacks, privatizations, and corporate lobby control of public policies and subsidies, but by ever-soaring public tax evasion near one trillion dollars annually about which governments and trade treaties have done nothing to correct yet.

Thus governments which could invest in sustaining humanity’s social and ecological life support systems from growing deterioration and collapse are now systematically bankrupted or debt enslaved along with most citizens. In consequence without governments knowing why, the world economy slips into ever deeper recession from the collapse of economic demand at the public and majority levels.

Eating the World Alive as Global Competition

The new law of human evolution is that people are required to compete for more money and commodities for themselves as “necessary to survive,” with the borderless system de-regulated and structured to increasingly impoverish the great majority while multiplying the wealth of the rich. The facts are now long in. Corporate globalization is not only out of control. It is eating the world alive at all levels toward cumulative collapse of organic, social and ecological life organization. Global competition means, in fact, the majority’s life means and security keep falling as the environment is looted and polluted on ever larger scales of depredation. Yet only “more growth” of this system is imagined as a solution. The system is clinically insane.

While the common life-ground is blinkered out a-priori by the ruling value system, those deprived and left behind disappear into multi-level big lies proclaiming the opposite. This is why the facts are not reported. This is why claimed actions to stop the world bleeding blinker out the system disorder causing them. This is why even progressives assume economic falsehoods as if they were true. Like a cancer system at the macro level, this exponentially multiplying private money-sequence system has only one set-point – to blindly grow itself while masking the life-devouring disorder as “enhancing people’s well-being.” •

John McMurtry is Professor Emeritus at the University of Guelph and elected Fellow of the Royal Society of Canada. His work has been translated from Latin America through Europe to Japan, and he is the author/editor of UNESCO’s three-volume Philosophy and World Problems,as well as more recently,The Cancer Stage of Capitalism; From Crisis to Cure
.

A specter is haunting Socialism – the specter of Sanders. The presidential run of Bernie Sanders, a nominally “independent” Senator from Vermont, has garnered at least nearly 200,000 claimed volunteers and $73 million in donations in 2015. His campaign has been heralded by the Left for it’s unabashedly populist rhetoric, with economistic calls for a “political revolution against the Billionaire Class.” There’s apparently just one problem: he’s running as a Democrat.

Sanders and the Democrats

In spite of how some on the Left might portray him, Bernie Sanders did not just wake up one day and say we need a political revolution, nor was his decision to run as a Democrat an incidental mistake. Sanders has long played a role as a false alternative from the Democratic Party, the primary run being only the most recent blatant shattering of his myth, although many supporters still cling to the pieces of “independence.” Bernie Sanders became involved in third party politics beginning in 1971, with his membership in the anti-war Liberty Union Party and his candidacy under their name for various statewide Vermont political positions from 1972 to 1976, before leaving the Party and orientating towards local elections. On the national level, the exit from LUP was underpinned by Sander’s support for Democratic presidential candidates- Jimmy Carter beginning in 1976, and campaigning for Walter Mondale in ’84.[i]

In 1981, Sanders successfully ran for Mayor of Burlington, Vermont as an independent, unseating a six-term Democrat incumbent. A new liberal progressive coalition formed to drive the electoral bids of Sanders, the precursor to the modern Vermont Progressive Party. From 1983 to ’87, Sanders would continue to win re-election against both Democrat and Republican challengers. Sanders was noted for his ardent anti-war positions, and opposition to certain imperialist policies of the federal government, a marked contrast from his current stances. In 1986, Sanders ran for Governor of Vermont, apart from the Liberty Union Party (who fielded their own candidate), solidifying the past division between himself and a layer of grassroots third-party supporters who buoyed his earliest campaigns. Despite continued “progressive coalition” support, Bernie’s electoral momentum came to a halt in 1988, following a failed run for the US House of Representatives. After seeing out his Burlington mayoral term, Sanders briefly departed from political activity. When returning to active political activity in the 1990’s, a new Bernie Sanders was formed. As the Vermont Liberty Union Party describe the rightward consolidation:

Bernie–out of office for the first time in eight years–then went to the Kennedy School at Harvard for six months and came back with a new relationship with the state’s Democrats. The Vermont Democratic Party leadership has allowed no authorized candidate to run against Bernie in 1990 (or since) and in return, Bernie has repeatedly blocked third party building. His closet party, the Democrats, are very worried about a left 3rd party forming in Vermont. In the last two elections, Sanders has prevented Progressives in his machine from running against Howard Dean, our conservative Democratic Governor who was ahead of Gingrich in the attack on welfare.

The unauthorized Democratic candidate in 1990, Delores Sandoval, an African American faculty member at the University of Vermont, was amazed that the official party treated her as a nonperson
and Bernie kept outflanking her to her right. She opposed the Gulf build-up, Bernie supported it. She supported decriminalization of drug use and Bernie defended the war on drugs, and so on…..

After being safely elected in November of 1990, Bernie continued to support the buildup while seeking membership in the Democratic Congressional Caucus–with the enthusiastic support of the Vermont Democratic Party leadership. But, the national Democratic Party blew him off, so he finally voted against the war and returned home–and as the war began–belatedly claimed to be the leader of the anti-war movement in Vermont.[ii]

A very clear affinity to the Democratic Party was then established. Democratic leader Howard Dean clarified the relationship Bernie Sanders has to the Dems on a 2005 episode of Meet The Press. Responding to a question on Sanders’ socialism in the run up to an upcoming Senate bid, he said “Bernie can call himself anything he wants. He is basically a liberal Democrat, and he is a Democrat that–he runs as an Independent because he doesn’t like the structure and the money that gets involved. And he actually has, I think, some good points about campaign finance reform. The bottom line is that Bernie Sanders votes with the Democrats 98 percent of the time And that is a candidate that we think… (w)e may very well end up supporting him. We need to work some things out because it’s very important for us not to split the votes in some of the other offices as well.”[iii]

For Sander’s loyalty to the Democrats, the current primary campaign opposite Hillary Clinton is the first time in the 21st Century he has faced a DNC-backed challenger for electoral office. Even with a decades long electoral success resume, no independent party has been built with the seal of Sanders’ approval. Instead, he has given consistent endorsements and funding for Democrats nationally including, through PAC fronts, right wing Democrats.[iv] Disgracefully this is matched by his active campaigning against other independent campaigns, even of those by the Vermont Progressive Party which was founded by Sanders supporters. On the independent campaign of Ralph Nader in 2004, Sanders said, “Not only am I going to vote for John Kerry, I am going to run around this country and do everything I can to dissuade people from voting for Ralph Nader.”[v]

Unfortunately, even armed with history, the role of Bernie Sanders as a loyal opposition has been ignored by much of the Left. To posit that perhaps paradoxically running openly as a Democrat allows the opportunity of potential success for a “Socialist” candidate is fatally flawed, an understanding that cannot escape Sanders. The campaign has long been doomed as a non-starter, exactly because of the Democratic Party machine Sanders has aided and continues to provide pseudo-independent cover to. The Democratic Party, surprise surprise, is not actually democratically structured. Instead the primary process is overly determined outside of the caucuses by “super delegates,” primarily currently elected Democratic Party politicians. These super delegates control 20% of the overall delegate vote, and five hundred out of nearly eight hundred have already pledged support for Clinton. [vi] These pledges are not even coming exclusively from party hardliners, even presumed Sanders endorsers like Sherrod Brown of Ohio have gone into the camp of Clinton. Hillary then has the greatest party backing of any Democratic Party primary candidate at least since 1980. Only two House Representatives have endorsed Sanders, no senators, no governors. [vii]

As for the other 80% of delegate votes, derived via the caucuses, the picture isn’t much prettier. While the first two primaries of Iowa and New Hampshire look likelier by the day to swing towards Sanders, they represent a fraction of a percent of the number of delegates required at the 2016 Democratic National Convention. Additionally, New Hampshire and Iowa- along with Sanders’ Vermont- are three of the nations five whitest states. Demographics will give an inevitable electoral challenge to Bernie Sanders, particularly in the South, who was polled last June at only 9% support amongst non-White Democrats nationally. Clinton however enjoys generally positive name-recognition and support amongst Black Democrats. [viii] This is in large part due to the complicity of the extra-parliamentary wings of the Democratic Party.

The majority of unionized workers now belong to a union which has endorsed Clinton, an affirmation of labor activist Steve Early’s warning that if “organized labor plays it cautious and safe, jumping on the Clinton bandwagon instead of rallying around Sanders, it will be just one more sign of diminished union capacity for mounting any kind of worker self-defense, on the job or in politics.” Much of the institutions of the Black community are also firmly embedded in the Democratic Party machine, and thusly the Clinton campaign. [ix] In September, Sanders reached out to the Congressional Black Caucus, holding a meeting for the Caucus generally panned as a failure with only six CBC participants. This is half the number of CBC members who have already endorsed Clinton, twelve, a full quarter of CBC members. [x]

The lock-step march of the Black elite behind the Clinton campaign in the form of intellectuals like Michael Eric Dyson, over fifty Black mayors and the U.S. Black Chambers (of Commerce) endorsing Clinton, conservative church leaders, and continued patronage by Democratic Party front groups like the Urban League and the NAACP, communicates less the monopoly Clinton has over the political imagination of Black workers, and more a deep political disconnect. This political disconnect between the Black elite and the Black working class continues the political crisis exemplified by the uprisings in Ferguson and Baltimore. To this, Democratic Party offers no solutions, most certainly none desired by much of the Black youth who have ruptured with the old guard.

In September of 2014, in the wake of the Ferguson protests, over thirty elected Black Democrat St.Louis County, Missouri officials formed the “Fannie Lou Hamer Coalition.” While invoking radical rhetoric, the Coalition endorsed a Republican for the Missouri State House, citing an anti-incumbent and anti-Democrat mood. As one Republican supporter said: “We’re so baptized into voting for Democrats. . . . Look at all the Democrats that have done wrong to you.”[xi] At the Coalition’s launching press conference a 27 year old Black factory worker and hip-hop artist, a resident of the neighborhood Mike Brown was murdered in, “told the coalition that most of the youth are not going to follow them, but they will follow young men like him who have been on the ground since day one of the protests.” A coalition which pendulum-like swings from Republicans to Democrats is hardly a solution to the political fissures erupting in Black America. Numerous new organizing efforts have used the rhetoric of a New Civil Rights Movement, while funneling that energy into co-optionary dead ends. “Our generation is tired of this… It’s the young men who have being doing the fighting, but it’s still the young men who are not being heard. If it wasn’t for us fighting, these organizations wouldn’t be forming right now.” [xii] Unfortunately nor does the dominant organization emerging in this new period, Black Lives Matter, offer any alternative to the two-party system.

The Two-Way Street of Pressure Politics

The Black Lives Matter organization, headed by intellectuals Alicia Garza, Patrisse Cullors, and Opal Tometi, for a lengthy period strategically maintained an anarchistic abstention from the 2016 elections in terms of endorsements, while tactically simultaneously disrupting various election rallies. BLM came to strain under the new terrain of party politics. Rightist branches of the network, like that in Boston, embarrassingly appealed to the moral faculties of politicians,[xiii]while more controversial actions like the shutdown of Bernie Sander’s Westlake Plaza speech in Seattle haven’t been principally defended. On the Seattle incident, BLM addressed it in a statement, saying “(r)egardless of the merits of this individual action which, among some, are still up for debate, one isolated incident cannot be the basis of judgment for the movement as a whole.” This is a shameful distancing from the actions of BLM activists, if “one isolated incident” was correct, then absolutely it should not just be defended- including its “merits”- but held up as an example for the “movement as a whole”! While they claim that their “work is not funded or driven by any political party nor is it influenced by local or national candidates,” this is clearly contradicted by the electoral orientation of the network. Flowing from this work, came the inevitable reckoning with reality. [xiv]

Black Lives Matter aided in creating a political vacuum in the modern Black Freedom Movement, by not definitively pointing to alternatives to the two-party system, while simultaneously placing demands on that system. This vacuum was readily filled by liberals like DeRay McKesson who, with his liberal Campaign Zero, met with Hillary Clinton, Bernie Sanders, and requested meetings with Republican candidates as well. Quickly, Campaign Zero took headlines and their platform began to define the movement, propelling BLM to build a relationship with the Democratic Party. Where McKesson called for a town hall candidates forum, BLM one-upped with a petition for a debate. However it was made clear on an episode of MSNBC’s Melissa Harris-Perry’s show that, radical language aside, the differences are minimal. Alicia Garza clarified the trajectory of BLM as such:

I think the big thing that we`re concerned about is that thus far, the Democratic Party has not done the work that it needs to, to genuinely engage black voters. And we have been doing that work. So has my colleague, DeRay. And certainly, again, it`s less a question of the format to us. We want to make sure that the Democratic National Committee is having serious conversations at every single level about how to address the crisis facing black communities today. And what we think that does not
mean is resting it on the shoulders of black folks to do that work for them. “

“I think what`s relevant is the question of our access to the democratic system. And what`s also relevant is the question of how democracy works right now, which to be honest, and to be frank, is locking out people like the members of our network from participating in genuine ways.

The issue with the lack of response from the DNC, and this is not a new demand, right? There`s lots of conversation happening in the DNC about opening up the process so more people can participate. And actually opening up the process so candidates can get closer to movements without being sanctioned for doing so.[xv]

Garza, rather than pointing to a break from the Democrats, instead gestures towards further inroads between “movements” and the DNC. The failure of pressure politics was put on full display, when Alicia Garza appealed to the very DNC resolution endorsing BLM, which BLM had supposedly rejected, as leverage to demand a full debate on #BlackLivesMatter with the Democrats. This was a furthering of BLM’s general strategy of confrontational pressuring, rather than challenging, of the Democrats.

What is made clear here, is that rather than the campaign of Bernie Sanders and the 2016 Democratic Party primary election cycle being an across the board gain for the “Left,” it in fact has been a rightist influence on large swaths of the Left, both on recent movements, as well as long-standing organizations. This is an inevitability where generally the working class have no independent institutions to resist electoral conservativism. American Leftist political parties in their current idealist (liberal) form, disconnected from specifically working class activity, cannot replace the role of institutions. Other examples can be made reflecting this reality.

Nominally the Green Party has maintained an independent position from the Democratic Party, with a Jill Stein campaign underway already. However, within the rank-and-file fissures have formed on the issue of Bernie Sanders. This is most visibly the case in Maine, where leadership members intervened to silence discussion of supporting Sanders, sparking threats of a wide-scale departure from the GP. The creator of the “Greens for Sanders” Facebook page, Maine State Party Treasurer Daniel Stromgren, claimed that “the majority of our 40,000 voter membership is going to vote for Sanders if he beats Hillary.” This claim was reinforced by Benjamin Meiklejohn, State Party Senior Advisor: “Statistically speaking, if you look at the numbers, between 80 and 97 percent of our own party’s members will not vote for the Green presidential candidate in the general election.”[xvi] For the Greens, the Sanders campaign cannot be boiled down merely as a short term tactical orientation, as due to the present ballot access laws, organizing here and now is a necessity to maintain a presence in upcoming ballots and consistent openings for electoral challenges to the Left of the Dems.

As Bruce Dixon writes “Currently the law keeps Greens and others off the ballot in more than half the states. Precise details vary according to state law, but if a third party candidate after obtaining one-time ballot access receives about 2% of total votes, a new ballot line is created, granting ballot access to any potential candidate from school board to sheriff to US congress who wants to run as something other than a Republican or Democrat. That, many participants agreed, would be a significant puncture in the legal thicket that now protects Democrats against competition on the ballot from their left. But a nationwide trans-partisan ballot access campaign to create a national alternative to the two capitalist parties is something left activists must begin serious work a good 18 months before a November election, essentially right now.”[xvii]

This again points to the barriers Bernie Sanders builds impeding potential third-party victories. An orientation towards the Sanders campaign, without simultaneously concretely building an alternative (not just vocalizing in favor of one), reveals a level of disingenuous populism. This is why Green Party candidate “Dr. [Jill] Stein is asking for [Sanders] supporters to think about helping her party now with ballot access in order to have another option on the ballot in November as a “Plan B” for them.” [xviii] “As of July 2015, [the GP] are on the ballot in 20 states, reaching 55% of the population. In play for 2015 is 9% of the population. In 2016, [the GP will] be fighting for another 26% of the population. About another 10% of the population lives in states with the most challenging ballot access laws.” [xix]

Of course, it is absurd to speak with any seriousness of an independent Bernie Sanders campaign, even aside from the ballot access laws. Sanders himself has made clear his intentions to not run as an independent multiple times. [xx] Additionally, his ties with the Democratic Party have been strengthened through the primary. In November, the Sanders campaign agreed to a join fund-raising agreement with the Democratic National Committee. “The move, which comes more than two months after Hillary Clinton’s campaign signed such an agreement in August, will allow Sanders’ team to raise up to $33,400 for the committee as well as $2,700 for the campaign from individual donors at events… (Sanders) also recently lent his name to a fundraising letter for the Democratic Senatorial Campaign Committee, according to a campaign adviser, in another indication of his slowly growing ties to the party’s infrastructure.”[xxi] The majority of Sanders supporters are just as tied to the Democratic Party, with a recent poll showing Clinton with 59% and Sanders with 26% of the party’s support, and of primary Sanders supporters- 59% also comfortable with a Clinton nomination. With Clinton consistently polling around merely 15% unfavorability amongst Democrats, the number of Sanders supports who will find it within themselves to vote Clinton in 2016 is sure to rise.[xxii]

Dead On Arrival is my assessment of the Bernie Sanders campaign, and the movement of “Sandernistas.” Even where a movement for Bernie is a Left rather than Rightward shift, it is a zero-sum game to the DNC’s benefit. This is why the DNC has allowed an “insurgent” their platform, even highlighting Sanders’ campaign in email blasts.[xxiii] Whereas, in the midst of inner-party disputes, “progressive” Howard Dean had his 2004 primary run brutally taken down by a Clinton led leadership. A precursor to Sanders, Dean and his 140,000-strong “Deaniacs” movement broke records at this pre-Citizens United time with over $15 million raised, and an average donation of $25. Tens of thousands of dollars were spent on attack ads against Dean by DNC insiders, culminating in a failing third-place at the Iowa caucus, and the infamous decontextualized “scream” for which he would be politically eviscerated. “Howard Dean was assassinated in broad daylight. Unlike Kennedy’s ‘grassy knoll,’ Dean’s killers are not hiding—it was the Democratic Party itself, and more specifically the Democratic Leadership Council.”[xxiv]

No less will Sanders campaign be eventually suffocated by the DNC, however, whereas Dean’s campaign was partially the product of a rift within the leadership of the Party, Sanders hardly could be said to have the Democratic Party, leadership or structures, in his cross hairs. Calls for a movement then coming from campaign offices, are marching orders into the DNC. Even explicit calls for a broader movement must be questioned by the previous measure– “A campaign has got to be much more than just getting votes and getting elected. It has got to be helping to educate people, organize people.”[xxv] Is this a statement of pressure politics, or the politics of rupture? Given what we know, this is clearly the former, a “socialism” not even passing for reformism. This is a repetition of history which should remind Leftists of all the calls after the 2008 presidential election to “hold Obama’s feet to the fire.” We should not fight to hold the state accountable, but to undermine it, as the Capitalist state can never be accountable to the oppressed.

Sanders, or Soviets?

Unfortunately, following decades of degrading labor and anti-capitalist movements, the Left is dominated by liberal ideas even on the fringes. Amongst Socialists, the conception of “movement” is less Trotskyist and more Alinskyist. Saul Alinisky was the author of Rules for Radicals, published in 1971, it became a bible for NGO “community organizers.” Inherently reformist and economistic, Alinskyism sees working class action in a utilitarian lens, as a means to an ends, rather than an expression of class consciouses. The ends in this case often are the winning of narrow reforms or pre-determined “leaders” being placed into positions of power. Given the recent history of various pressure campaigns like 15 Now and Black Lives Matter, whether intentionally so or eventually subsumed as such, the following critique of Alinskyism seems prophetic on its gains and limitations:

(T)he Alinsky form of opposing power is not sufficient, of course. That model takes a basic insight–one almost entirely absent from our national discourse these days–about the need to fight if you hope to win, and the need to oppose power with power, and does almost as little as possible with it: it defines powers narrowly, challenges them with a deeply formulaic strategy, and wins predictably narrow victories. These victories are actual victories, which should be a slap-across-the-face wake-up to the countless liberal and progressive organizations and ‘movements’ out there that never give the [few] people they involve in their campaigns an opportunity to experience the empowerment of actually winning something. But the victories of Alinsky groups are generally narrow and local; rarely if ever do they contribute to the creation of a new political circumstance in which similar groups of citizens will not have to form and fight and win in other places to achieve the same basic gain. They do not catalyze political change, really–just the resolution of a particular community’s ‘unique’ problems.[xxvi]

Returning then to the question of accountability, only institutions of the working class can ever hold their own “to the fire.” However, Sanders is not of the working class but a career politician, and is thusly an impediment to class independence where workers are expected to, in popular front fashion, liquidate themselves into his campaign – a liquidation evidenced by Socialist Alternative’s “Movement4Bernie” front group, whose website contains not a single criticism of Sanders. After decades of genuine workers institutions and organizing efforts being repressed by state violence, such as the case of the Black Panther Party, such institutions are vitally needed as the basis for “accountability” to bare any material meaning. Without them, elected Leftists, particularly those who carry no analysis of the extra-parliamentary wings of the Democrats, are forced into a centrism – swinging between, at worst, realpolitik allies, and at best, spontaneous class activity.

Proletarian institutions historically mean the commune, the soviet, the class-struggle based neighborhood and workplace councils. They build upon and transcend spontaneity, and they are the basis of dual power and thusly a new society: “All power to the Soviets.” The construction of such institutions, and the preparation for them to fulfill their historic role – this is the real task, which history in motion does not concede time to vacillate on. For Sanders though, Socialism has nothing to do with the “withering away of the State,” nothing to do with actual working class democracy and power. Instead, while appearing to be working class centered, Sanders is first and foremost state centered – in this historical context, centered on the Capitalist state. This overrides whatever promised reforms he may be campaigning on, as this places him at odds with the working class. Sanders, by defining Socialism so loosely as simply anything the government does, including the police and military(!), empowers the 70 members (in 2009) of the Democratic Socialists of America serving in the US Congress to continue their delusion that they are “Socialists” by reinforcing the state. [xxvii] This is why the head of the DNC, Debbie Wasserman Schultz, can refuse to answer what the difference between a Democrat and a Socialist is when asked. Her response, “the more important question is, what’s the difference between a Democrat and a Republican?” may also be shared by the leadership of SAlt and much of the soft-Left.[xxviii]

Murray Bookchin wrote of Sanders as Mayor of Burlington, Vermont in 1986, describing him as “a centralist” with an “administration, [that] despite its democratic proclivities, tends to look more like a civic oligarchy than a municipal democracy.” Bookchin concluded his criticism, which included details of a Burlington waterfront sellout, thusly: “This ‘managerial radicalism’ with its technocratic bias and its corporate concern for expansion is bourgeois to the core — and even brings the authenticity of traditional ‘socialist’ canons into grave question. A recent Burlington Free Press headline which declared: ‘Sanders Unites with Business on Waterfront’ could be taken as a verdict by the local business establishment as a whole that it is not they who have been joining Sanders but Sanders who has joined them. When productivist forms of ‘socialism’ begin to resemble corporate forms of capitalism, it may be well to ask how these inversions occur and whether they are accidental at all. This question is not only one that must concern Sanders and his supporters; it is a matter of grim concern for the American radical community as a whole.”[xxix]

The numerous Sanders campaign promises have limitations exactly because of the restrictions of the capitalist state which he is tied to in his “Sewer Socialism” even more than he is tied to the Democratic Party. The economic program of Sanders, which could be generalized as a Keynesian one, is a 2016 version of Obama’s “Hope and Change,” and just as sterile – sterile, as a result of the constraints of the Capitalist system in crisis. In the midst of all this talk of taxing the “Billionaire class” lies a economy struggling with a marginal recovery post-Great Recession and teetering on collapse. The assumptions present in the economic outlook of Sanders are completely at odds with a Marxist outlook. Whereas liberal economists look at the drop of investment in productive sectors of the economy, as opposed to speculative investment, as a political issue of mis- or non-allocated funds, which the state must thusly appropriate to direct the marketplace, Marxists actually have an analysis founded not in (politically Left) Keynesianism, but in (politically Right) classical Liberalism. The world is then flipped on it’s head from the perspective of a Keynesian. The root causes of the 2008 long depression – Ponzi speculations, fantastical casino betting, and easy credit – are in reality the superficial expressions of a low rate of profit, the ability for the Capitalist class to turn a dollar into two dollars. Government investment outside of particular circumstances, which both Keynes and Krugman have acknowledged to be a World War economy, are an encroachment on the profits of corporations.[xxx] This encroachment cycles further drops in investment, as the promise of profitable returns is lowered. On this, New York University professor Michael Rectenwald wrote that,

As it stands, over the past forty-plus years, we have witnessed a tremendous curtailment of investment in social reproduction, such that the withering of state and private property investments has resulted in a shrunken and shrinking fixed capital base, along with the continual sloughing off of even more layers of variable capital [the labor power of workers]. Given the new, vaunted robotic automation that is promised, even more layers of workers could lose their jobs, thus offsetting or more than offsetting any gains Sanders or Clinton might achieve in employment. And if this were not bad enough, the increased technology investments in robotics [to the detriment of labor] would have the effect of further drawing down the rate of profit, thus serving to further stifle investment in production and thus labor. Likewise, the increasing introduction of robotic automation would enlarge the already growing layers of displaced workers.[xxxi]

On multiple fronts then the Socialism of Bernie Sanders, and the Socialism of much of the Left is found lacking. In common discourse it has become a trope to posit Sanders as the “good,” contrasted to the “perfect” that is a pie-in-the-sky Socialism. At this historical juncture however, the perfect is not the enemy of the good; in fact, the good is the enemy of the perfect – and it’s not even very good. Whereas the “Left” is supposedly a spectrum from liberals and progressives to radicals and revolutionaries, on the crucial issues before us today of the economy and the state, Marxism is not simply a ratcheting up of “progressive” rhetoric, but is it’s own logic entirely. Stoking illusions in the ability for the Capitalist state to respond to the needs of the people is a doomed strategy, one having already played out under Syriza in Greece. The only correct political response to Capitalism in crisis is the organization of a working class conscious of itself as having interests separate from the ruling class and the Capitalist state.

Jim B further wrote in his previously quoted 2006 article that “(i)n the end, real organizing and ideology are deeply linked. When the left has either one of these without the other–as with the Alinsky-based models (real organizing without ideology) and countless 20th-century manifestations of intellectual socialism (ideology without real organizing)–the right has the opportunity, if it has both (as it does in the U.S. today, in spades), to beat the living shit out of us.”[xxxii] While the Far Right, emphasized most by ISIS, are consolidating in the wake of the failures of the Left, whether it be Syriza’s capitulation to austerity in Greece or Chavizmo’s historic electoral loss in Venezuala, we must build up the conscious forces of the historic revolutionary Left amongst working and oppressed communities. A strategy of autonomy from the state matching that of the Far Right is both a tactical maneuver to undercut and transcend divisions within the working class, while also a strategic necessity in building towards a situation of dual power.

While it may seem laughable to contrast organizing around Bernie Sanders to organizing for a revolution, that is precisely the situation we’ve found ourselves in 2016 – closer to the precipice of another economic crash, with the Far Right much better positioned to take advantage. Immediately, campaigns around democracy – “the lifeblood of Socialism” – should be introduced for every facet of working class life, such as campaigning for community and tenant run public housing. Mass movements should not be treated as means, but as the basis for new expressions of class organizing. Ultimately, the “vanguard,” as the highest expression of class consciousness, can only appear out of class struggle. That the United States is populated by numerous “vanguard” parties, each an exception to the history of such organizations as the central bodies of co-operation and debate between genuine working class leaders, should cease to be the norm. Replacing today’s Left should be one which is both rooted, and emanates from, the working class and their conditions. Nothing else can move us. forward.

As we predicted months ago, the IMF officially green-lighted the acceptance of China’s currency – the Yuan – into the IMF’s foreign exchange basket. According to Reuters, this move paves the way for the IMF to place the yuan on a par with the U.S. dollar. This is the latest in a series of global developments that threatens to eliminate the U.S. dollar as the world’s reserve currency. Experts predict this announcement will trigger one of the most profound transfers of wealth in our lifetime. So if you want to protect your savings & retirement, you better get your money out of U.S. dollar investments and into the one asset class that rises as currencies collapse.

The IMF Holds Supreme Power

The International Monetary Fund, or IMF, is one of the most secretive and powerful organizations in the world. They monitor the financial health of more than 185 countries. They establish global money rules and provide “bail-out” assistance to bankrupt nations. Some are warning that any move by the IMF to supplant the U.S. dollar could be catastrophic to American investments.

And now, the IMF has made the first move. As reported by The Wall Street Journal, the IMF officially green-lighted the acceptance of China’s currency – the Yuan – into the IMF’s foreign exchange basket. This marks the first time in history the IMF has expanded the number of currencies in the foreign exchange basket. This means that the Chinese currency will now become a viable global alternative to the U.S. dollar.

According to Juan Zarate, who helped implement financial sanctions while serving in George W. Bush’s Treasury department, “Once the [other currency] becomes an alternative to the dollar, rules of the game begin to change.”

Leong Sing Chiong, Assistant Managing Director at a major central bank, said this dollar alternative “is likely to transform the financial landscape in the next 5-10 years.”

Currency expert Dr. Steve Sjuggerud warned, “I’ve been active in the markets for over two decades now, but I’ve never seen anything that could move so much money, so quickly. The announcement will start a domino effect, that will basically determine who in America gets rich in the years to come, and who struggles.”

Dr. Sjuggerud says if you own any U.S. “paper” assets—and that includes stocks, bonds, or just cash in a bank account–you should be aware of what’s about to happen and know how to prepare. A number of experts believe a recent spike in gold and silver prices is a direct result of the IMF’s action. Precious metals notoriously rise when the U.S. dollar falls.

The Death of the U.S. Dollar in One Frightening Graph

For the last 600 years, there have been six different global reserve currencies controlled by world superpowers. The latest – the U.S. dollar – has dominated world currency for over 80 years. The alarming fact is, global reserve currencies have collapsed every 80-90 years for the last six centuries! What does this mean for America and the dominance of the U.S. dollar? Based on recent evidence and long-standing historical trends, experts predict the imminent collapse of the U.S. dollar! What’s more alarming? Many Americans aren’t yet doing the one thing that will save their savings & retirement from U.S. dollar collapse.

Just take a look at the graph below. It shows the lifespan of dominant currencies going back 600 years. Notice that the U.S. dollar has now been the dominant currency for 88 years, about the same length of time as its predecessors:

It’s obvious why experts say that the U.S. dollar’s days as the world’s reserve currency are coming to a climactic end.

All Fiat Currencies Collapse

“Fiat” currency is paper currency backed by nothing tangible. As opposed to “sound money” which is was backed by gold or some other valuable commodity, a fiat currency is backed by nothing more than faith in the government. The U.S. dollar has been a fiat currency since Nixon closed the gold window in 1971 in what was the greatest heist in American history. The scary fact is, the average life span of a fiat currency is 40 years, and the U.S. dollar has now exceeded 40 years as a fiat currency!

Prior to 1933 and for well over 100 years, the dollar was backed by gold, and $20 bought you an ounce of gold. But after the government stole all U.S. citizens’ gold in 1933 for a $20 paper certificate, gold was revalued at $35 U.S.D., meaning the dollar was devalued by 43% overnight and all foreign and domestic holders of dollars were effectively robbed.

After Nixon closed the gold window completely in 1971, it took $67 to buy an ounce of gold, devaluing the U.S. dollar by 50% again. Today, it takes well over a thousand U.S. dollars to buy that same ounce of gold. Why? Because the U.S. dollar is now nothing more than a fast-declining Federal Reserve note backed by a corrupt government that is saddled with $18 trillion in unpayable debt — growing by $10 million per minute!

Protect Yourself Before It’s Too Late

This “Paper Money Experiment” has run its course. The Federal Reserve, the U.S. government, and Wall Street crooks have misused their power by mismanaging the dollar, and now there are global repercussions. The debt load sitting on top of the U.S. dollar is unsustainable and will continue to crush the dollar’s purchase power until no one wants to hold U.S. dollars, and they are no longer accepted for global trade. The dollar’s collapse means that every single one of your paper investments that are dollar-backed – stocks, mutual funds, money markets, cash accounts, etc. – will go down right along with the dollar! Meanwhile, the government and the banks will find a way to protect themselves at your expense.

So as we say goodbye to the U.S. dollar’s dominance, it doesn’t have to mean goodbye to your savings & retirement. Remove at least some of your savings & retirement from the dollar-backed, paper-based financial system and protect it with the one asset that has outlasted every fiat currency ever invented for the last 5,000 years: Gold.

BY

Start with money: bank loans and cash from family or other sources. For a firm or business, this represents its capital.

Use the capital to employ people to make a product or provide a service and sell it for more money — i.e. profit — so the capital grows.

As capital grows, what is owned by capitalists represents equity, and this ownership capital can be sold in shares on the stock market.

Share prices trade higher when buyers expect profits to grow.

Profit comes from pocketing the difference between what the workers produce in sales value and what they are paid. So, capitalists pay people as little as they can get away with, about as much as what workers need to get along in life.

Capitalists have to compete with each other and lower pay is one way they do it. Moving jobs to lower-wage countries has been a widespread way of lowering business costs.

Other ways include lobbying for lower taxes and easier environmental and labour regulations, and investing in political parties that deliver them.

Having access to low-cost borrowing is a main concern of capitalists. Central bankers are watched closely as central banks set interest rates.

As the capitalist class gathers this week in Davos, Switzerland for the World Economic Forum, the corridor talk is going to be about the rising cost of U.S. dollar loans and the collapsing price of share capital, as stock markets tumble around the world.

To begin the year 2016, both the U.S. Dow Jones index of leading stocks, and the broader Standard & Poor’s index are off to their worst start ever.

At the end of 2015, the U.S. Federal Reserve Bank raised interest rates by 250 basis points or one-quarter of one per cent. It has been widely expected that this will be the first of four increases to come, so that overall in 2016, the U.S. central bank rate would rise by one per cent.

As the cost of borrowed capital goes up, the expected profit rate goes down. This has lowered expectations about stock market prices which have been climbing for years. World stock markets have fallen, imitating depressed U.S. stock prices.

In the case of China, where banks are considered shaky, the stock market slump pre-dated the fall in U.S. stock prices.

It would be nice to think U.S. central bankers have things under control but there is good reason to doubt it. In the late 1970s, and early 1980s, the American central bank led by Paul Volcker raised interest rates to the 20 per cent range, creating a debt crisis that has plagued poorer countries ever since.

U.S. central bank chief Alan Greenspan admitted to keeping interest rates too low for too long after 2001, setting off a lending boom that brought Wall Street to its knees when the housing market faltered in 2007-08.

His successor Ben Bernanke orchestrated an estimated $7.7-trillion government-led bailout, that included the world’s richest banks, while distressed mortgage holders lost their houses.

Under Bernanke, the Federal Reserve pumped up the stock market by buying bonds. This credit expansion known as quantitive easing added trillions to its balance sheet. Current Fed Chair Janet Yellen, promoted from Vice-Chair in 2014, wants to slow credit growth.

The Fed is counting on a strong U.S. economy to withstand small interest rate hikes. Expect the Fed to be told to abandon further rate hikes as the economy weakens.

The European central bank has lately turned to looser credit in order to ignite a stagnant European economy; it has not been working.

The Bank of Canada Governor Stephen Poloz has mused about Canada reducing already low interest rates to the zero rate that has been in effect in the U.S. until recently.

The poorly disguised intention of Governor Poloz is to talk down the value of the Canadian dollar in the hope of staving off the recessionary conditions that dominated the first six months of 2015.

The capitalist world economy is marked by recurrent systemic crisis. Workers lose out even in good times. Pushing wages down has worked for capitalists. The top one per cent held as much wealth as the rest of humanity last year, according to Oxfam.

Underwriting cheap credit worked for a while as well. Now capitalists fear the era of nearly free money is ending. The rest of us should question the workings of capitalism.

Duncan Cameron is the president of rabble.ca and writes a weekly column on politics and current affairs.This article published in rabble.ca on 19th January 2016

Richard Fidler

Seventeen years after Hugo Chávez was elected Venezuela’s President for the first time, the supporters of his Bolivarian Revolution, now led by President Nicolás Maduro, suffered their first major defeat in a national election in the December 6 elections to the country’s parliament, the National Assembly.

President Nicolás Maduro addresses Chavista supporters on December 7, following election defeat the previous day.

Coming only two weeks after the victory of right-wing candidate Mauricio Macri in Argentina’s presidential election, it was a stunning setback to the “process of change” in Latin America that Chávez had spearheaded until his premature death from cancer in 2013. The opposition majority in the new parliament threatens to undo some of the country’s major social and economic advances of recent years as well as Venezuela’s vital support to revolutionary Cuba and other neighboring countries through innovative solidarity programs like PetroCaribe and the ALBA fair-trade alliance.

The election result is an important gain for Washington as it mounts renewed efforts to restore neoliberal hegemony in Latin America and fracture the new continental alliances (UNASUR, CELAC) that Chávez was instrumental in initiating as alternatives to the U.S.-dominated Organization of American States (OAS).

A Decisive Majority for the Opposition Rightists

Under Venezuela’s mixed electoral system, which combines direct election of deputies with proportional representation of parties, the right-wing opposition coalition Democratic Unity Roundtable (MUD, by its Spanish acronym), with 56.2% of the popular vote, won 109 seats. With the support of three indigenous deputies, elected separately, the MUD could have a two-thirds majority in the 167-seat unicameral Assembly.

The vote for President Maduro’s United Socialist Party (PSUV), which campaigned in alliance with smaller parties in the Gran Polo Patriótico Simón Bolívar (GPP), was 5,622,844, just under 41% of the total. The GPP won a total of 55 seats: 52 for the PSUV plus 3 for its allies, including 2 for the Communist party.[1] (After the election, Venezuela’s Supreme Court (TSJ) suspended the swearing in of four incoming legislators – three opposition, one PSUV – pending investigations of voting irregularities in Amazonas state. More on this below.)

Convene a National Constituent Assembly, and initiate a recall referendum for President Maduro (although under article 72 of the Constitution, a call for a referendum to remove a public official from office requires the signatures of 20 per cent of the electorate);

Submit international treaties, conventions or agreements to referendums; and

Pass or modify any draft organic law (laws enacted to develop constitutional rights, which serve as a normative framework for other laws, or which are identified as such by the Constitution).

“a two-thirds majority gives the opposition all of the institutional weapons necessary to reverse many of the key transformations of the Venezuelan state achieved by the Bolivarian Revolution over the last seventeen years.”

They will now be empowered to revoke critical revolutionary legislation such as the Organic Law of Communes, the Organic Work and Workers’ Law (LOTTT), among numerous others, repeal international treaties such as the ALBA-TP and PetroCaribe, as well as pack the Supreme Court with an eye toward impeaching President Nicolás Maduro.

Why the Opposition Victory?

Whether the MUD will do all or any of these things, of course, depends on a number of factors that are not necessarily within its control – above all, how the social and class forces in Venezuela react in the changed political landscape. The MUD itself is not a cohesive political party, and has many divisions among its components. It is composed of 18 parties, 13 of which are now represented in the National Assembly! They are united primarily by their opposition to Chavismo, the spirit and program of the Bolivarian Revolution championed by Hugo Chávez and his successors. But can the election result be interpreted as a vote against Chavismo as such?

With a voter turnout of 74.5% (up from 66.4% registered in the previous legislative election, in 2010), the PSUV gained more than 350,000 votes over its result in 2010. However, it lost almost 2 million votes from the more than 7.5 million for Nicolás Maduro, the PSUV candidate in the 2013 presidential election. Where were those losses registered? Gabriel Hetland, a U.S. professor specializing in Venezuelan politics and a first-hand observer of the election, notes that the opposition vote in affluent districts “was nearly identical to what it was in the 2010 National Assembly election.” It is clear, he writes in The Nation,

“that the MUD’s overwhelming victory was due to widespread support among popular sectors that have traditionally favored Chavismo. The MUD won 18 of 24 states, including Hugo Chávez’s home state of Barinas and erstwhile Chavista strongholds in Caracas such as 23 de Enero, Catia, and Caucaguita, a very poor district that abuts Petare, one of the largest barrios in Latin America.”[2]

Hetland reports on his conversations with voters on election day:

“In the popular-sector voting centers I visited I encountered numerous people planning to vote for the opposition. In one barrio in the city of Porlamar… only two of the 18 people I spoke with planned to vote for the PSUV. None of the voters supporting the opposition mentioned liberty or democracy as a reason for doing so. All of them said they were supporting the opposition because of the material difficulties they faced. ‘I want change,’ a woman told me. Pointing to the baby she was holding she said, ‘I can’t buy formula, and my father, who is 60 years old, had to go to another country for medical treatment’ because the medicine he needed was unavailable in Venezuela. Over and over I was told of people’s frustrations with long lines and shortages of food and basic goods. Another young woman holding a baby said, ‘I get up at 4 am to stand in line and I can’t even buy food. I want change.’ As she said this, the women standing next to her nodded their heads vigorously.”

Hetland concludes:

“The sentiments expressed by these voters suggest that it’s more accurate to think of the election result less as a victory for the opposition and more as a rejection of the government.”

As Hetland indicates, voter disaffection with the PSUV reflected the harsh effects of the country’s current economic crisis on the conditions of ordinary Venezuelans, including many who in the past have voted by large majorities in support of the Chavista government. It was a “voto castigo,” a punishment vote.

Economic Crisis

The shortages of basic goods, the high inflation, and the currency devaluation now afflicting millions of Venezuelans are directly linked in one way or another to the country’s dependency on hydrocarbons production. Oil accounts for more than 95 per cent of Venezuelan exports, and almost half of its fiscal income. High oil prices made it possible for the government to invest heavily in social programs, education and efforts to diversify the economy.

However, the international price of oil has dropped precipitously in recent years with the outbreak of the global capitalist crisis in 2008 and the recent exponential increase in North American production as a result of new, environmentally disastrous techniques like fracking and tar sands production. The increase in U.S. production alone has drastically cut the demand for foreign oil by the world’s biggest consumer – and now biggest producer – of petroleum. The dependent oil-producing countries have failed to develop a common strategy in response – Saudi Arabia, fearful of losing market share, has rejected pressure from Venezuela and others to raise prices – and OPEC, revived in 1999 by Hugo Chávez, has ceased to be a serious player in international markets.

The drop in the international price – from $100 (U.S.) or more per barrel to less than $30 today – has cut deeply into Venezuelan state revenues. Although the government has maintained spending on social programs and continued to provide inexpensive oil to its Caribbean neighbors, it has had to borrow to cover budget deficits; its total foreign debt increased from 10% of GDP in 2006 to 25% of GDP in 2014 (although this is still a relatively low debt to GDP ratio compared to the rest of Latin America).

When the government curtailed access to dollars at the official exchange rate,[3] the black market exchange rate shot up, increasing exponentially in 2014-15. While the official rate has been fixed at 6.3 bolivars to the dollar since 2013, by the end of 2015 the black market was offering 800 bolivars to the dollar. This in turn played havoc with the price controls the government had imposed for most essential goods in order to counter retailers’ tendency to sell at the black market rate instead of the official rate. This meant that over time more and more products were priced far below the price they could obtain in neighboring countries.

More and more Venezuelans will acquire dollars at the official rate, purchase goods at the subsidized prices for many necessary products, then export them across the border for an enormous profit. Some major companies, writes Telesur correspondent Gregory Wilpert,[4] are involved in this process too, “claiming that they need to import essential goods, and then either not importing these or re-exporting them to acquire dollars. In mid-2014 Maduro estimated that up to 40 per cent of all goods imported into Venezuela (at the official exchange rate) were smuggled right back out again.”

The state has found itself forced to use its dollar currency reserves to import massive amounts of basic products, which it then sells at subsidized prices through state-owned distribution channels. This allows Venezuelans access to a limited amount of basic foodstuffs at low prices. But since these products are scarce, the black market increases exponentially and prices reach many times the regulated price.

“The situation has now become truly untenable,” writes Jorge Martin. “Ordinary working people are forced to queue for hours on end to be able to access small amounts of products at regulated prices in the state-owned supermarkets and distribution chains, and then pay extortionate prices to cover the rest of their basic needs.”

Martin notes that Venezuela’s GDP contracted 4% in 2014, and is forecast to fall by a further 7% to 10% in 2015. “President Maduro has said that inflation this year will be 85%, but many basic products have already risen by an annual inflation rate of over 100%. The IMF forecasts an inflation rate of 159% for the whole year in 2015.”

Corruption and Inaction

While oil income from royalties and taxes has until recently brought extraordinary state revenues, also extraordinary are the amounts that are effectively embezzled through the joint collaboration of corrupt Venezuelan capitalists and a section of the state bureaucracy, often linked together through interlocking directorships in banks, insurance companies, firms that contract with the state, and even family members located abroad, using a variety of techniques: import fraud, speculative manoeuvres with sovereign debt certificates, negotiation in marginal markets of currencies and debt certificates of the state oil corporation PDVSA, etc.

In one of a series of in-depth exposés of this process, which it describes as a “mafia-like accumulation of capital,” the left pro-Chavistatendency Marea Socialista has documented net capital flight by the “Boliburgesía” (the new “Bolivarian” bourgeoisie) of almost $260-billion (U.S.) between 1998 and 2013 alone. This, it notes, is equivalent to 25 times the cost of Brazil’s World Cup expenditures, 10 times the fall in state income caused by the anti-Chávez oil industry shutdown in 2002-03, the construction of 6 million new homes under the government’s current housing mission, or 37 times the difference between subsidized gasoline sales prices and the cost of production.[5]

There were of course other reasons for the government defeat, as TeleSUR correspondent Tamara Pearson explains: among them, disinformation by the opposition media (still predominant in Venezuela); recent setbacks for the left elsewhere in Latin America themselves linked to the global capitalist crisis; and the alienation of many younger voters who “don’t remember what it was like in Venezuela before Chávez was elected in 1998.” But she notes as well that

“while the opposition has attracted some of the less politically aware social sectors to its anti-Chavismo discourse, the government has also lost some ground from conscientious and solid revolutionaries, partly due to its lack of a solid response to the opposition’s ‘economic war.’ Although it’s easier said than done to combat a rentier state, capitalist system, historical corruption, and big business’s campaign of economic sabotage, Maduro has only announced things like national commissions to deal with the situation.

“While people spend up to seven hours a week lining up for food, and while many of them understand that the government isn’t directly responsible for the situation, the lack of a serious response and significant measures hasn’t helped support for the government.”

Further, says Pearson,

“while the government clearly sides with the poor, for multiple reasons including more right-wing attacks, it has becoming increasingly distanced from the organized grassroots…. [W]ith the way the government communicates with the people, the way it gets information out and involves people in serious decision making – there has been a step back in recent times. This aspect of the Bolivarian revolution is perhaps the most important, so the significance of it and its impact on people shouldn’t be underestimated.”

Some Immediate Responses to Election Verdict

President Maduro promptly accepted the official election results but pledged to continue defending the progressive laws and social programs adopted and implemented during the last decade and a half. A new stage is opening in the Bolivarian Revolution, he said in his election night address, a stage in which the central task is to deepen the revolution by building the country’s productive capacity at all levels – “communal, communitarian, industrial and regional.” Venezuelans, he added, should see the current difficulties in the oil industry as “warnings… and as opportunities to replace the rentist petroleum system with a self-sustaining, self-sustainable productive economic system.”

(This would require some major changes in the present program of the PSUV, the Plan de la Patria or Plan for the Fatherland. Although it lists as one of its five major historical objectives “going beyond the capitalist petroleum rentist model,” it also calls for doubling Venezuelan oil production from 3.3 million barrels per day in 2014 to 6 million in 2019.)

Following Maduro’s election night speech, hundreds of Chavista activists from various popular movements marched in solidarity the next morning through the streets of Caracas to the presidential palace (Miraflores). Maduro invited the crowd to send in representatives to meet with him to discuss the next steps. In this and two subsequent meetings, 185 voceros or spokespersons of communes, commandos, brigades, etc. hammered out some lengthy documents outlining what they considered key objectives to be pursued in the coming months.[6] In addition to proposals for greater government control over foreign trade, banking and finance, more effective tax collection and a sustained fight against bureaucracy and corruption, a central theme was the need to strengthen the role and productive capacities of the communal councils and communes, the territorially based grassroots organizations that the Chavistas see as the foundational units for the eventual creation of a “communal state” of direct democracy “from below” to replace the top-down bureaucratic administration of the capitalist state.[7]

A theme heard more and more in the extensive public debate now underway in radio and TV, on web sites and in the social media is the need to move toward nationalization of the major banks and financial institutions, and possibly to establish a state monopoly over foreign trade – essential measures, in my view, if Venezuela is to establish public control over the speculators and protect itself from the worst vagaries of uncontrollable world prices.

Maduro has established work teams to systematize these and other such grassroots proposals in a “central document of the Bolivarian Revolution” as a guide to action in its new stage. And he has convened an organizing committee to meet January 23 to prepare a “Congress of the Fatherland,” although providing few details on what he has in mind.

Communal Parliament

On December 15 Diosdado Cabello, PSUV deputy leader and president of the outgoing National Assembly, presided over the first gathering of the National Communal Parliament. This legislative body was provided for in the Organic Law of Communes, adopted in 2012, but it was only recently that there was a sufficient critical mass of municipal and regional communes to convene it. The communes had begun electing delegates (voceros) to this body in August 2015. It was originally intended that it would function as an adjunct to the National Assembly. “Now it’s up to you in the National Communal Parliament, to discuss and present proposals that you consider necessary to help President Nicolas Maduro,” Cabello told the delegates. He said this grassroots parliament would help to shield the country’s laws of Popular Power from right-wing attempts to rescind them in the new National Assembly.

The Communal Parliament has met several times since, and in early January announced that its voceros from Venezuela’s 24 states would meet February 4 to adopt their internal rules of functioning, which will then be published in a new monthly publication, the Gacetas Comunales.

In a parallel development, the outgoing National Assembly hastily adopted in late December a spate of pending legislation that was promptly ratified by Maduro in accordance with the Constitution. A major one, the Law of Presidential Councils of the People’s Power, will provide a means for direct citizen input in decision-making by the government (in this case, the President). The purpose, as the introduction to the law proclaims, is “to strengthen the System of Popular Government” by establishing a basic network that “addresses in a profound way the concrete problems of the population through policies, plans, programs and projects for sectoral development… based on the principles and values enshrined in the Constitution….”

Also adopted was a ground-breaking Anti-GMO and Anti-Patenting Seed Law, the result of an ongoing grassroots campaign by environmental and campesino social movements over the past two years. “The law is a victory for the international movements for agroecology and food sovereignty,” write the authors of the linked article, “because it bans transgenic (GMO) seed while protecting local seed from privatization.

“The law is also a product of direct participatory democracy – the people as legislator – in Venezuela, because it was hammered out through a deliberative partnership between members of the country’s National Assembly and a broad-based grassroots coalition of eco-socialist, peasant, and agroecological oriented organizations and institutions.”

The new opposition-dominated National Assembly may very well attempt to reverse some or all of these legislative gains, of course. However, PSUV deputy Diosdado Cabello, the former Assembly president, notes that the Constitutional Division of the Supreme Court may disallow national laws “which are in conflict with this Constitution, including omissions… in failing to promulgate rules or measures essential to guaranteeing compliance with the Constitution.”[8]

On January 6 President Maduro reshuffled his cabinet and created several new ministerial departments as part of an “economic counter-offensive.” He said the new leadership team would prioritize agricultural production as part of a plan for economic recovery.

MUD Aims for Destabilization – and Overthrow of Maduro

Maduro was scheduled to present a detailed report on his plans to the new National Assembly on January 12, although he acknowledged that there was no assurance it would accept them.

However, on January 12 the Assembly session was adjourned in confusion, followed soon after by a humiliating backdown by the MUD majority. As mentioned earlier, three of the MUD deputies had been suspended by the Supreme Court for alleged irregularities in their election. However, when the new Assembly first met, the MUD swore in the three, in defiance of the Court. The Court responded by declaring that the Assembly proceedings would then be of no force or effect. Now, with the PSUV absent and only a handful of MUD deputies present, the Assembly president Henry Ramos Allup (himself an old-line politician[9] elected president in a private session of the MUD, contrary to Assembly rules) then found there was no quorum and adjourned the proceedings.

However, amidst the ensuing public outcry at these shenanigans, the three suspended deputies wrote to the leadership of the Assembly asking that their swearing-in be reversed. The next day, Ramos Allup called the Assembly to order, had the Supreme Court ruling read aloud, then stated that the Assembly leaders would “abide by the ruling of the Supreme Court.” But Maduro has yet to give his promised report.

The opposition’s climbdown probably reflects strategic divisions within their ranks between a relatively moderate faction led by Henrique Capriles, which is said to favour posing as a credible alternative to the government with proposals to solve the economic crisis, and a more confrontationist faction, apparently dominant, which is led by virulent opponents of the government. Its main leader is Leopoldo López, currently serving a 13-year prison sentence for his involvement in the guarimba street protests in 2014 that resulted in 43 deaths, as well as other violent actions. Both Capriles and López have links to the coup plotters of 2002.

The opposition’s initial defiance of the Supreme Court underscored its determination to steer toward an outright confrontation with President Maduro, with the goal of destabilizing his government as much as possible. Ramos Allup says he hopes to prepare Maduro’s ouster within the next six months. Another primary goal is passage of an amnesty law to free what the opposition terms “political prisoners,” that is, all those who have been involved in violent protests (including Leopoldo López).

Among other promised or rumoured measures favoured by the anti-government majority in the Assembly, writes Greg Wilpert, are a law

“to give ownership titles to the beneficiaries of the housing mission. Over the past five years the government has constructed one million public homes, which it has essentially leased to families in perpetuity, but without giving them a title that can be bought and sold. The reasoning behind this is to avoid the development of a speculative housing market of homes built with public funds. The opposition is betting that most public housing beneficiaries would prefer a saleable ownership title, so that they can sell the home and thereby possibly make a profit from it.

“… a rumored project to dollarize the economy. It is obvious to everyone in Venezuela that the current economic situation of high inflation, frequent shortages of basic goods, long lines at supermarkets, and a massive black market for price-controlled products, is not sustainable. One ‘solution’ to these problems that some opposition leaders have favored it to simply get rid of the local currency, the bolivar, and base the entire economy on dollars, just as Ecuador did in 2001. Aside from undermining the country’s economic sovereignty, such a move would also almost definitely mean major painful displacements for economy, leading to increased inequality and unemployment. …

“Other major projects on the opposition docket,” reports Wilpert, “include the repeal of a wide variety of progressive laws that were passed during the Chavez and Maduro presidencies, beginning with the land reform, [and including] re-privatization of key industries and the dismantling of price controls, among other things.”

Capriles has also proposed a “padlock law” to “put an end to oil diplomacy” and “stop the government from giving away and wasting the country’s resources” – a threat clearly aimed at the PetroCaribe initiative that has provided Caribbean countries including Cuba with much-needed oil at preferential repayment rates.

Basically, the virulence of the opposition majority in the legislature – they have even removed portraits of Hugo Chávez (and Simón Bolívar!) from the Assembly precincts – reflects the visceral determination of the class they represent to avenge and reverse not only the laws but the very foundations of the Bolivarian regime initiated by Chávez and his original Movement for the Fifth Republic. No wonder this opposition holds the 1999 Constitution and its institutions in such contempt. That Constitution effectively terminated the institutional setup underlying the rule of the bourgeois elites who had monopolized political power for generations, characterized by the sham alternance of two similar capitalist parties cemented in the infamous “Punto Fijo” accord. In its place the new Constitution outlined the creation of a real sovereign democracy in which the great mass of the population were to be the “protagonists,” the living actors, of their destiny as implemented through a variety of grassroots-operated institutional forms that are only now beginning to become reality.

A New Stage – and a Challenge

Apart from the role of the Supreme Court (itself threatened by the opposition-dominated National Assembly) in trying to restrain the Assembly within constitutional limits, there are now three powers contending in this conflictual context: the President, head of state and supported by the military, who have confirmed their loyalty to the Constitution and the Bolivarian Revolution; the National Assembly, at loggerheads with the President and determined to replace him and all he stands for as soon as possible; and what is commonly referred to as the People’s Power, the grassroots mobilizations of ordinary citizens organized territorially in communal councils and communes or politically in support of the “process of change” – a force that is diffuse and still lacking a coherent structured national leadership. It is unclear at this point what role this relatively new force can play in helping to overcome the current economic and political crisis. The governing party, the PSUV, is largely an electoral machine and somewhat discredited by the implication of some leaders in corruption and bureaucratic manoeuvres. It needs a fundamental overhaul.

There is much talk among Chavistas of answering the crisis by “deepening the revolution,” taking a “qualitative leap” as Chávez himself advocated in his Golpe de Timón speech.

In a remarkable essay, Venezuelan militant José Roberto Duque of Misión Verdad issues a challenge. If, he says, the Presidency and the Assembly are determined to prevent each other from fulfilling its role, “then it will be technically and procedurally impossible to to legislate (the Assembly’s mission) or to govern (the executive’s mission) in Venezuela.

“As such, we will be on the threshold of a situation in which a third actor, the most important and decisive amongst state subjects (popular power, citizens, you and I) must take a position with respect to the legitimacy of the actions of our representatives….

“Today we Chavistas unanimously support the ‘Communal State’ project proposed by Chávez. How many of us are prepared to keep building that Communal State even when the National Assembly eliminates the Law of Communal Councils and the Law of the Communes in one foul stroke? Will we have the stamina to keep building the other society clandestinely and illegally? Or will we submit to bourgeois laws that order us to give the entire productive apparatus up to private business?”

Duque explores these and related questions and concludes:

“The communes should be structures that are capable of surviving at the margins of the state and government, even functioning as areas of rearguard and resistance at the moment of an institutional collapse – when the Bolivarian government ceases its functions because of either legal or illegal means.

“We must be capable then of creating and consolidating self-sustainable and self-sufficient structures. We are in a very early stage of our communard history, and that is the reason why a ministry still exists that is in charge of financing the launch of productive projects in the communes. But in the future it would be an aberration for the communes and other organisations and means of production to continue to be dependent on state financing and other entities.”

I think this is the fundamental challenge facing the Bolivarian Revolution in the coming period. But it must be accompanied by measures at the level of the existing state to overcome the economic crisis – through implementation of an emergency program that can provide immediate relief to the masses of Venezuelan workers and campesinos. •

Richard Fidler is an Ottawa member of the Socialist Project. This article first appeared on his blog Life on the Left.

Present negative trends in China’s financial system and economy were accurately predicted by me three years ago as occurring if there was any influence of policies of the World Bank Report on China.

While China has made major steps forward in areas such as the Asian Infrastructure Investment Bank and New Silk Road (‘One Belt One Road’) unfortunately in some areas World Bank policies did acquire influence. As predicted they led to present negative trends.

There should also be clarity. China has the world’s strongest macroeconomic structure so these trends will not lead to a China ‘hard landing’. But they are a confirmation that no country, including China, can escape the laws of economics. As long as there is any influence of World Bank type policies, which are also advocated by Western writers such as George Magnus and Patrick Chovanec, there will be problems in China’s financial system and economy.

The article I wrote in September 2012 which was published under the original title ‘Fundamental errors of the World Bank report on China’ is republished without alteration.

* * *

The World Bank’s report China 2030 has, unsurprisingly, provoked major criticism and protest. I have read World Bank reports on China for more than 20 years and this is undoubtedly the worst. So glaring are its factual errors, and economic non-sequiturs, that it is difficult to believe it was intended as an objective analysis of China’s economy. It appears to be driven by the political objective of supporting current US policies, embodied in proposals such as the Trans-Pacific Partnership.

Listing merely the factual errors in the report, of both commission and omission, as well as the elementary economic howlers, would take up more column inches than are available to me. So what follows is just a small selection, leaving space to consider the possible purpose of such a strange report.

The report has no serious factual analysis of the present stage of China’s economic development. On the one hand it is behind the times and “pessimistic”, saying China may become “the world’s largest economy before 2030”. This is extremely peculiar as, by the most elementary economic calculations, (the Economist magazine now even provides a ready reckoner!) China will become the world’s largest economy before 2020.

On the other hand, the report greatly exaggerates the rate at which China will enter the highest form of value added production. As such, the report calls for various changes in China, and bases its calls on the rationale of “when a developing country reaches the technology frontier’. But China’s economy, unfortunately, is not yet approaching the international technology frontier, except in specialized defence-related areas. Even when China’s GDP equals that of the US, China’s per capita GDP, a good measure of technology’s spread across its economy, will be less than one quarter of the US’s. Even making optimistic assumptions, China’s per capita GDP will not equal the US’s until around 2040, by which time China’s economy would be more than four times the size of the US’s! Put another way, China will not reach the technology frontier, in a generalized way, for around three decades, so this rationale can’t be used to justify changes now.

The report appears to envisage China’s development path differing from that of every other country on the planet. It claims that in China “the continued accumulation of capital… will inevitably contribute less to growth”. But one of the most established trends of economic development, first outlined by Adam Smith and econometrically confirmed to the present day, is that capital’s contribution to growth increases with development. Deng Xiaoping certainly argued that economic policy must have “Chinese characteristics”, i.e. be adapted to China’s specific conditions. However, he never argued that China was exempt from economic laws, which is what this report appears to envisage!

The report makes elementary economic mistakes, such as confusing the consequences of high export shares with trade surpluses. It argues: “If China’s current export growth persists, its projected global market share could rise to 20 percent by 2030, which is almost double the peak of Japan’s global market share in the mid-1980s when it faced fierce protectionist sentiments… China’s current trajectory… could cause unmanageable trade frictions.” But if China increases its import share at the same rate as exports, this would not create major trade frictions. Japan’s problem was trade surpluses, not export share.

It is almost impossible to believe, given such elementary mistakes, that this report was intended as a serious objective analysis of China’s economy. What, then, is its goal? , The report spells out its goal clearly enough in calling for China to abandon the policies launched by Deng Xiaoping which brought such success. It says: “Reforms that launched China on its current growth trajectory were inspired by Deng Xiaoping… China has reached another turning point in its development path when a second strategic, and no less fundamental, shift is called for.”

What is this new “non-Dengite” economic policy? Deng Xiaoping’s most famous economic statement was “it doesn’t matter whether a cat is black or white provided it catches mice”. Effectively, this means, in economic terms, that a company should not be judged by whether it is private or state owned but by how it performs. The proposed new economic policy overturns Deng’s dictum by saying: “Reintroduce judging cats by colour, promote the private sector cat.”

The consequences of this are clearly seen in the report’s financial proposals. During the international financial crisis, China was protected by its state-owned banking system. The US and European privately-owned banks simultaneously created the financial crisis and were flattened by it, throwing their economies into crisis. China, however, suffered no significant setback.

The reasons for the US and European banking crisis are well understood. Modern banks are necessarily very large, both in order to undertake international operations and because of the inherent risk of large investment projects. They are literally “too large to fail”, as the failure of any large bank creates an unacceptable economic crisis. This theoretical point was rammed home by the devastating consequences of Lehman’s collapse, following which no government will allow a large bank to fail.

But a situation in which the state is blocking the bankruptcy of a large bank, whose profits are being privately retained, creates disastrous risk. If large private banks are state guaranteed against crippling losses, but retain profits, they are incentivized to undertake potentially profitable but highly risky operations. The disastrous results of this scenario were seen during the financial crisis.

Extraordinarily, this report proposes that China abandon the financial system which brought it successfully through the financial crisis and instead adopt the one which led the US and Europe to disaster. This is the real significance of “privatization would be the best way to make SFIs [State Financial Institutions] more commercially oriented”.

This ties in with US TransPacific Partnership pressure for the elimination of China’s state-owned companies, which are seen as giving China a completive advantage over the US. The US, of course, does not possess such companies. If the US is worried about the competitive disadvantage created by not having state-owned companies, it should create some, not call for China to abandon its own.

The last World Bank report of this type was published in February 1991 and its Study of the Soviet Economy provided the basis for Russia’s economic policies of the 1990s.

The result was that Russia suffered the greatest peacetime economic disaster to befall any country. GDP declined by more than half. Russian male life expectancy fell by four years and we saw the beginning of a population decline, which continues to this day. The USSR subsequently disintegrated, in what Vladimir Putin called the greatest geopolitical catastrophe of the 20th century. Russia has not recovered.

This type of economic program is therefore not simply a “theoretical” model. It has been thoroughly and demonstrably discredited on account of the catastrophes it has produced. Russia was ill advised enough to adopt this type of economic program. It is to be hoped, then, that China does not follow the same course

* * *

John Ross is Senior Fellow at Chongyang Institute for Financial Studies, Renmin University of China.

This article is based on a post from John Ross’ blog, published on the 8th of Jan, 2016.